Exhibit 10.14
THIRD MASTER AGREEMENT FOR
PURCHASE OF INSURANCE POLICIES
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THIS AGREEMENT FOR PURCHASE OF INSURANCE POLICIES (the "Agreement") is dated as
of March 24, 1997, by and between Dignity Partners, Inc., a Delaware corporation
(the "Seller"), with an office at 917 Tahoe Boulevard, Suite 204A, P.O. Box
8819, Incline Village, NV 89452, Mutual Benefits Corp., a Florida corporation
(the "Purchaser"), with an office at 2881 E. Oakland Park Boulevard, Suite 200,
Fort Lauderdale, FL 33306 and Brinkley, McNerney, Morgan, Solomon & Tatum LLP
("Escrow Agent").
WHEREAS, Purchaser desires to purchase from Seller, and Seller desires to sell,
all right, title and interest in and to the life insurance policies set forth in
Exhibit A hereto (each a "Policy" and collectively the "Policies"), including
but not limited to the right to designate the beneficiary or beneficiaries
entitled to receive the death benefits payable pursuant to the Policies set
forth in Exhibit A, as amended from time to time (the "Proceeds"), to reflect
the prepaid premiums as of each Closing Date (as hereinafter defined) and the
net death benefit as set forth in the verifications of coverage.
WHEREAS, title to the policies listed on Exhibit A is held by Bankers Trust
Company as the owner and/or beneficiary pursuant to the Agency Agreement dated
as of November 13, 1993, among Seller, and Bankers Trust Company, and;
WHEREAS, the parties hereto desire the Law Firm of Brinkley, McNerney, Morgan,
Solomon & Tatum, LLP to act and it has agreed to act as Escrow Agent as set
forth below.
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereby agree as follows:
1. Purchase and Sale of Policy. (A) Subject to the terms and conditions set
forth herein, Seller agrees to sell, transfer, convey, assign and deliver to
Purchaser and Purchaser agrees to purchase from Seller, all Seller's right,
title and interest in and to the Policies, including the right to designate the
beneficiaries thereunder. Seller agrees that Seller, subject to Section 1(I)
hereof, shall have no further right, title and interest in and to the Policies
and the Proceeds of the Policies as of the Closing Date as hereinafter defined.
(B) "Closing Documents", as hereinafter referenced, shall mean all documents in
Seller's possession relating to Seller's acquisition and ownership of any policy
and include, but are not limited, (i) originals of all documentation and
agreements executed or received in connection with Seller's initial acquisition
of each Policy, including original medical records, medical releases, consent
forms, insurance releases, the purchase or letter agreement, letter of mental
competency of the insured under and of the original seller of such Policy,
insurance questionnaire completed by the applicable insurance company or groups
administrator or employer, viator's statement, disclosure statement required
under applicable law, and correspondence since original acquisition, (ii)
resolution of legal authority of the corporate officer signing on behalf of
Seller, (iii) original of policy or copy of handbook, if available, (iv)
corporate approval documents, as defined in paragraph 4(B) below.
(C) On or before March 27, 1997, the Seller shall provide to the Purchaser: (i)
copies of all blank assignment and beneficiary forms to be used in naming
Purchaser or its designeee as assignee or owner and beneficiary, or both if
applicable, (ii) verification of insurance coverage, (iii) the copies of the
insurance policies.
(D) On or before April 18, 1997, the Purchaser shall complete all of the
assignment of ownership and change of beneficiary documents and return them to
the Seller to be signed, held and delivered by Seller pursuant to paragraph
1(E).
(E) At the time that the Purchaser delivers, pursuant to paragraph 1(D), to the
Seller the assignment and/or the change in beneficiary forms for each policy,
the Purchaser shall deposit with the Escrow Agent and the Escrow Agent shall
acknowledge to the Seller that the Escrow Agent is holding in escrow an amount
not less than the aggregate Purchase Price for each Policy.
(F) Within two business days of receipt of the Escrow Agent's acknowledgement of
holding the funds for a particular policy, the Seller shall deliver to the
applicable insurance company, or other party, properly executed assignments of
ownership and changes of beneficiaries necessary to cause such insurance
companies or other applicable parties to designate Purchaser or its designee,
(i) if an individual policy, (a) the owner or absolute assignee and (b) the sole
beneficiary under the Policy and (ii) if a group policy, (a) the absolute
assignee or (b) the irrevocable beneficiary under the Policy and the "Corporate
Approval Documents."
(G) Upon receipt of written acknowledgment from the applicable insurance company
or other party of the assignment of ownership and/or change of beneficiaries on
each Policy, (the "Closing Date") the Escrow Agent shall disburse by wire
transfer the Purchase Price for that Policy to the Seller within two business
days provided that in the event more than 20 such acknowlegements are received
in any one day Escrow Agent shall have reasonable a time to disburse the
Purchase Price for such policies. Upon receipt of the Purchase Price for any
Policy, Seller shall deliver to Purchaser the remaining Closing Documents.
(H) Notwithstanding any failure on the part of the Purchaser to perform pursuant
to Section 1(D), the Escrow Agent shall hold all monies on deposit and disburse
such monies pursuant to this Agreement.
(I) In the event of the death of a person insured under a Policy before the
change of beneficiaries is acknowledged by the insurance company or other party;
or in the event the Escrow Agent has not received the written acknowledgement
required under paragraph 1(G) for any policy within 30 days of the date the
assignment and/or beneficiary form was delivered pursuant to paragraph 1(E), the
purchase and sale of such Policy shall be rescinded and both parties shall take
all reasonable action in order to place the other party in the position it would
have been in prior to such purchase and sale. Such action on the part of
Purchaser shall include, but not be limited to, reassigning such Policy and the
beneficiary rights thereunder to Seller and returning any death benefits
Purchaser may have received for such Policy. Such action on the part of the
Seller shall include, but not be limited to, returning the purchase price paid
in respect of such Policy, together with any interest thereon, and any premiums
Purchaser may have paid on such Policy. Purchaser shall have a reasonable time
to distribute the purchaser price for such policies.
2. Purchase Price. In consideration of the sale, transfer, conveyance,
assignment and delivery of each Policy, Purchaser shall, in full payment
thereof, pay to the Seller a total, hereinafter defined Purchase Price equal to
(A) 59% of the aggregate net death benefits shown in Exhibit A for each Policy
and (B) the pro rata amount of any prepaid premium paid by Seller as of the
Closing Date . In the event any Policy listed on Exhibit A is not transferred to
the Purchaser or its assign, the Purchase Price shall be reduced by an amount
equal to 59% of the aggregate net benefits and the pro rata amount of any
prepaid premium set forth in Exhibit A for any Policy not transferred. The
Seller shall be responsible for the payment of any premiums that are due under
the normal terms and conditions of the Policy, on or before the Closing Date for
any of the Policies listed on Exhibit "A".
3. Disbursement Procedures. (A) Upon receipt of corporate approval pursuant to
paragraph 4(B) of this Agreement, the Closing shall occur when the Seller has
delivered to the Purchaser or the Escrow Agent the original of all Closing
Documents, including the properly executed assignments of ownership and changes
of beneficiaries and the "Corporate Approval Documents." Upon receipt of all
documents, Purchaser shall deliver all assignment of ownership and/or change of
beneficiary forms to the insurance companies which issued the applicable
Policies or other applicable parties necessary to cause such insurance companies
or other applicable parties to designate Purchaser or its designee (A) if an
individual policy, (i) the owner or absolute assignee and (ii) the sole
beneficiary under the Policy and (B) if a group policy, (i) the absolute
assignee or (ii) the irrevocable beneficiary under the Policy;
4. Covenants, Representations and Warranties of Seller. Seller hereby
covenants, represents and warrants to Purchaser as follows:
(A) Organization. Seller is a corporation duly organized, validly existing and
in good standing under the laws of the state of Delaware.
(B) Authorization and Approval of Closing Documents. Seller has obtained Board
of Director and shareholder approval for this transaction and shall provide
written evidence of said approvals reasonably satisfactory to the Purchaser
("Corporate Approval Documents") in the form of copies of such corporate
resolutions of the Seller duly authorized, certified and executed by the
Secretary of Seller showing shareholder and Board of Director approval of this
sale.
(C) Execution, Delivery and Performance of Closing Documents; Authority. Neither
the execution, delivery nor performance of this Agreement or any other Closing
Document by Seller will, with or without the giving of notice or the passage of
time, or both, conflict with, result in a default, right to accelerate or loss
of rights under, or result in the creation of any lien, charge or encumbrance
pursuant to any mortgage, deed of trust, lease, license, agreement, law, rule or
regulation or any order, judgment or decree to which Seller is a party or by
which Seller may be bound or affected. Seller has full power and authority to
enter this Agreement and this Agreement constitutes a valid and binding
obligation of the Seller.
(D) Original Acquisition of Policies. To the best of Seller's knowledge after
due inquiry, Seller has complied with all applicable laws in connection with its
original acquisition and ongoing servicing of each Policy. Each purchase or
letter agreement executed in connection with the Seller's original acquisition
of each respective Policy was validly authorized by the Seller and is
enforceable in accordance with its respective terms.
(E) Title to Policy. To the best of Seller's knowledge after due inquiry, each
Policy, when issued, was validly issued, is enforceable in accordance with its
terms, Seller is the named owner or acting on behalf of the named owner of the
Policy, and Seller has the legal right to either (i) assign ownership or (ii)
designate the beneficiary thereunder. Neither the Policy nor the Proceeds, to
the best of Seller's knowledge after due inquiry, is subject to any mortgage,
pledge, charge, security interest, encumbrance or adverse claim of any nature
whatsoever, direct or indirect, whether accrued, absolute contingent or
otherwise, including without limitation, claims of lien holders, collateral
assignees and irrevocable beneficiaries, except as may be set forth in Exhibit
A. To the best of Seller's knowledge after due inquiry, there exists no material
fact which would impair the validity or enforceability of or amount payable
under any Policy.
(F) Litigation. There is no litigation against Seller that could have an adverse
effect on this transaction or any Policy.
(G) Undertakings. Seller shall, to the extent it has knowledge, promptly notify
Purchaser of: (i) a change from the insured's current address, telephone number
or employment (if any); (ii) a change in the insured's attending physician(s);
(iii) any change regarding the diagnosis, treatment and prognosis of the current
mental and physical condition of the insured; and (iv) the death of any person
insured under a Policy. Further, Seller shall notify Purchaser of and forward
correspondence received in connection with any Policy and shall cause the
execution and delivery of any document, certificate or other written statement
required to be executed by Seller or Banker's Trust Company to activate or
maintain any disability waiver of premium provision on any Policy. Nothing in
this Section (4)(G) creates an affirmative duty to obtain or inquire as to any
of the foregoing. Seller agrees to take any and all actions, or cause such
action to be taken, reasonably requested by Purchaser, including the execution
and delivery of additional documents or information, in connection with the
consummation of the transaction contemplated by this Agreement, or reasonably
requested by Purchaser.
5. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Applicant as follows:
(A) Organization. Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of Florida and has full power and authority
to enter into this Agreement and to carry out the transactions contemplated by
this Agreement and the other Closing Documents. This Agreement and the other
Closing Documents constitute valid and binding obligations of Purchaser.
(B) Authorization and Approval of Closing Documents. All proceedings or
corporate action necessary to be taken by Purchaser to authorize the execution
and delivery of this Agreement and the other Closing Documents have been taken.
(C) Execution, Delivery and Performance of Closing Documents; Authority. Neither
the execution, delivery or performance of this Agreement or any other Closing
Document by Purchaser will, with or without the giving of notice or the passage
of time, or both, conflict with, result in a default, right to accelerate or
loss of rights under, or result in the creation of any lien, charge or
encumbrance pursuant to any provision of Purchaser's Certificate of
Incorporation or By-laws, mortgage, deed of trust, lease, license, agreement,
law, rule or regulation or any order, judgment or decree to which Purchaser is a
party or by which it may be bound or affected.
(D) Undertakings. Purchaser shall, to the extent it has knowledge, promptly
notify Seller of the death occurring prior to the Closing Date of any person
insured under a Policy.
(E) Litigation. There is no pending or threatened litigation against Purchaser
that could have an adverse effect on this transaction or any Policy.
(F) Acquisition of Policies. To the best of Purchaser's knowledge after due
inquiry, Purchaser has complied with all applicable laws in connection with its
acquisition of each Policy.
6. Indemnification.
(A) Seller Indemnity.
(I) Seller hereby indemnifies and agrees to defend and hold Purchaser and
its affiliates and respective directors, shareholders, employees and controlling
persons harmless from any, against and in respect of (and shall on demand
reimburse Purchaser for):
(i) any and all loss, liability or damage suffered or incurred by
Purchaser in respect of or in connection with any claim arising under any
Policy in connection with the breach of any representation or warranty by
Purchaser or the ownership and servicing by the Purchaser or its
affiliates occurring prior to the Closing Date or relating to the
business or activities of the Purchaser; and
(ii) any and all actions, suits, proceedings, claims, demands,
assessments judgments, costs and expenses, including without limitation,
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or oppose to the imposition
thereof, or in enforcing this indemnity.
(II) In case a claim shall be made or any action shall be brought against
the Purchaser based upon Section 6(A)(I.) of this Agreement and in respect to
which indemnity can be sought against the Seller pursuant thereof, the Purchaser
shall promptly notify the Seller in writing, and the Seller shall promptly
assume the defense thereof, including the employment of counsel chosen by the
Seller and approved by the Purchaser (provided that such approval by the
Purchaser shall not be unreasonably withheld), the payment of all expenses and
the right to negotiate and consent to settlement. If the Purchaser is advised in
a written opinion of counsel that there may be legal defenses available to it
which are adverse to or in conflict with those available to the Seller, or that
the defense of the Purchaser should be handled by separate counsel, the Seller
shall not have the right to assume the defense of the Purchaser, but shall be
responsible for the fees and expenses of counsel retained by the Purchaser, and
provided also that, if the Seller shall have failed to assume the defense of
such action or to retain counsel reasonably satisfactory to the Purchaser within
a reasonable time after notice of the commencement of such action, the fees and
expenses of counsel retained by the Purchaser. Notwithstanding, and in addition
to, any of the foregoing, the Purchaser shall have the right to employ separate
counsel with respect to any such claim or in any such action and to participate
in the defense thereof, but the fees and expenses of such counsel shall be paid
by the Purchaser unless the employment of such counsel has been specifically
authorized, in writing, by the Seller. The Seller shall not be liable for any
settlement of any such action effected without its consent, but if settled with
the consent of the Seller or if there be a final judgment for the plaintiff in
any such action with or without consent, the Seller agrees to indemnify and hold
harmless the Purchaser from and against any loss or liability by reason of such
settlement or judgment.
(B) Purchaser Indemnity.
(I) Purchaser hereby agrees to indemnify, defend and hold Seller harmless
and its affiliates and respective directors, shareholders, employees and
controlling persons harmless from and against, and in respect of (and shall on
demand reimburse Seller for):
(i) any and all loss, liability or damage suffered or incurred by Seller
in respect of or in connection with any claim arising under any Policy in
connection with the breach of any representation or warranty by the
Purchaser or the ownership and servicing by the Purchaser or its
affiliates occurring on or after the Closing Date or relating to the
business or activities of the Purchaser; and
(ii) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including, without
limitation, legal fees and expense, incident to any of the foregoing or
incurred in investigating or attempting to avoid the same or to oppose
the imposition thereof, or in enforcing this indemnity.
(II) In case a claim shall be made or any action shall be brought against
the Seller based upon Section 6(B)(I) of this Agreement and in respect of which
indemnity can be sought against the Purchaser pursuant thereto, the Seller shall
promptly notify the Purchaser in writing, and the Purchaser shall promptly
assume the defense thereof, including the employment of counsel chosen by the
Purchaser and approved by the Seller (provided that such approval by the Seller
shall not be unreasonably withheld), the payment of all expenses and the right
to negotiate and consent to settlement. If the Seller is advised in a written
opinion of counsel that there may be legal defenses available to it which are
adverse to or in conflict with those available to the Purchaser, or that the
defense of the Seller should be handled by separate counsel, the Purchaser shall
not have the right to assume the defense of the Seller, but shall be responsible
for the fees and expenses of counsel retained by the Seller, and provided also
that, if the Purchaser Seller shall have failed to assume the defense of such
action or to retain counsel reasonably satisfactory to the Seller within a
reasonable time after notice of the commencement of such action, the fees and
expenses of counsel retained by the Seller. Notwithstanding, and in addition to,
any of the foregoing, the Seller shall have the right to employ separate counsel
with respect to any such claim or in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be paid by the
Seller unless the employment of such counsel has been specifically authorized,
in writing, by the Purchaser. The Purchaser shall not be liable for any
settlement of any such action effected without its consent, but if settled with
the consent of the Purchaser or if there be a final judgment for the plaintiff
in any such action with or without consent, the Purchaser agrees to indemnify
and hold harmless the Seller from and against any loss or liability by reason of
such settlement or judgment.
7. Survival of Representations, Warranties and Covenants. Each statement,
representation, warranty, indemnity, covenant and agreement in this Agreement or
in any information document, certificate or other instrument delivered by or on
behalf of Seller pursuant or as incident to this Agreement shall survive the
consummation of the transaction contemplated by this Agreement.
8. Notices. Any and all notices or other communications required or permitted to
be given under any provisions of this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by overnight courier
addressed to the party at the addresses set forth in the preamble (or at such
other address as either party may specify by notice to the other party given as
aforesaid).
9. Legal And Other Costs. In the event that any party (the "Defaulting Party")
defaults under this Agreement and, as a result thereof, the other party (the
"Non-Defaulting Party") seeks to legally enforce rights hereunder against the
Defaulting Party, then, in addition to all damages and other remedies to which
the Non-Defaulting Party is entitled by reason of such default, the Defaulting
Party shall promptly pay to the Non-Defaulting Party an amount equal to all
costs and expenses (including reasonable attorneys' fees) paid or incurred by
the Non-Defaulting Party in connection with such enforcement.
10. Miscellaneous
(A) Entire Agreement. This writing constitutes the entire agreement of the
parties with respect to the subject matter hereof and may not be modified,
amended or terminated except by written agreement specifically referring to this
Agreement signed by the parties hereto.
(B) Waiver. No waiver of any breach or default hereunder shall be valid unless
in writing and signed by the party giving such waiver, and no such waiver shall
be deemed a waiver of any subsequent breach or default of the same or similar
nature.
(C) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of (i) Purchaser and its successors and assigns, and (ii) Seller and
its successors and assigns.
(D) Section Headings. The Section headings contained herein are for the purposes
of convenience only and are not intended to define or limit the contents of the
Sections.
(E) Cooperation. Each party hereto shall cooperate, shall take such further
action and shall execute and deliver such further documents as may be reasonably
requested by any other party in order to carry out any of the provisions and
purposes of this Agreement.
(F) Counterparts. This Agreement may be executed in one or more counterparts,
all of which taken together shall be deemed an original.
(G) Governing Law and Jurisdiction. This Agreement and all amendments thereof
shall be governed by and construed in accordance with the laws of the State of
Florida. Notwithstanding the foregoing, any action at law or in equity shall be
filed in any appropriate State or Federal court located in Broward County,
Florida. The parties to this Agreement hereby consent and submit to the personal
jurisdiction of such courts for the purposes of litigating any such action.
11. Purchaser and Seller appoint Brinkley, McNerney, Morgan, Solomon & Tatum LLP
as Escrow Agent hereunder for the purpose of holding funds for the purchase of
policies. The Escrow Agent shall hold and release monies pursuant to paragraph 1
of this Agreement. In those cases where the ownership of a policy is not being
transferred pursuant to Paragraph 1(I), the Escrow Agent shall return the
Purchase Price of that policy to the Purchaser after reviewing written
notification from the Seller.
12. In performing its duties as Escrow Agent, Brinkley, McNerney, Morgan,
Solomon & Tatum LLP shall not incur any liability to Seller or to Purchaser for
any damages, losses or expenses which either party may sustain or incur, unless
the same is a direct result of the breach of this Agreement, negligence or
intentional misconduct of Escrow Agent. Escrow Agent shall be entitled to rely
on any document(s) which Escrow Agent reasonably believes satisfy the terms and
conditions of the escrow. Seller and Purchaser each hereby agree to indemnify
and hold harmless Escrow Agent from and against all losses, claim, damages,
liabilities and expenses which it may sustain or incur hereunder, including,
without limitation, reasonable attorney's fees, which may be imposed upon Escrow
Agent or incurred by Escrow Agent in connection with the performance of its
duties herein, except for such losses, claims, damages, liabilities and expenses
related to Escrow Agent's breach of this Agreement, negligence or intentional
misconduct. Seller understands that the Law Firm of Brinkley, McNerney, Morgan,
Solomon & Tatum, LLP, Escrow Agent, is not rendering any legal advice to Seller
and has no responsibility with regard to this transaction contemplated in this
Agreement other than to comply with the terms of the provisions of paragraphs
1(E), 1(G), 1(H), 1(I), 11 and 12 of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
ATTEST PURCHASER
MUTUAL BENEFITS CORP.
By: By:/s/Les Steinger
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Typed or Printed Name of Witness Les Steinger, President
ATTEST SELLER
DIGNITY PARTNERS, INC.
By: By:/s/Alan B. Perper
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Typed or Printed Name of Witness Alan B. Perper, President
This Agreement is executed by Brinkley, McNerney, Morgan, Solomon & Tatum LLP
solely as Escrow Agent and Escrow Agent has no responsibility with regard to the
transaction contemplated in this Agreement other than to comply with the terms
of the provisions of paragraphs 1(E), 1(G), 1(H), 1(I), 11 and 12 of this
Agreement.
ATTEST ESCROW AGENT
BRINKLEY, MCNERNEY, MORGAN,
SOLOMON & TATUM LLP
By: By:/s/Michael J. McNerney
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Typed or Printed Name of Witness Michael J. McNerney